It's a recipe for ending biopharma's slow year for deals that almost looks designed in a lab.

Cancer drugs known as PARP inhibitors have major upside sales potential. There are two potentially acquirable makers of such drugs in Tesaro and Clovis, which recently saw shares jump due to potential interest from Gilead. Both their medicines are rushing toward approval just as a number of companies are getting hungry to buy a cancer-drugmaker.

A promising PARP inhibitor likely contributed to Pfizer's recent willingness to pay a hefty price for Medivation, and there's more intrigue to come.

PARP Pop

Shares in Tesaro and Clovis popped on Sept. 8 after cash-rich Gilead mentioned it may be interested in acquiring a PARP inhibitor, a kind of drug both firms are developing

Source: Bloomberg

AstraZeneca's PARP inhibitor Lynparza is already approved in the U.S. to treat a subset of ovarian cancer. That makes the class feel like a safer bet than, say, cell-therapy drugs, which have never been approved.

Particularly strong Phase 3 trial results for Tesaro's Niraparib in treating ovarian cancer, disclosed this summer, have raised hopes for the class. Wall Street's consensus forecast for the drug's 2020 sales jumped by more than $400 million immediately after Tesaro released the results. Tesaro announced Monday it had received a fast-track designation from the FDA, meaning a potentially quicker path to an approval already hoped for in 2017.

PARPocalypse

The market for PARP inhibitors is full of potential, but full of competition

Source: Bloomberg

All the PARP inhibitors chasing Lynparza to market are being tested in different cancers or in different populations, making their trial results difficult to compare with certainty. That makes it harder to figure out which drugs are potentially the best in the class, or if they're all kind of the same.

That may not stop the drugmakers and their potential acquirers from hoping their drug is the one PARP inhibitor to rule them all -- a blockbuster that will ride multiple approvals to multi-billion-dollar sales. Others might believe their drugs are close enough to best that they could still net a significant return.

The drugs are starting out in small populations of breast- and ovarian-cancer patients. But they are being tested in far wider populations. That potential adds to hopes (and sales expectations) that can go pretty much as high as your imagination takes you -- exactly the kind of thinking biotech M&A often requires.

Medivation, for example, has plenty of imagination, saying in July it believed talazoparib had a $30 billion addressable market. That projection, and the company's loud claims of its drug's superiority, should be taken with fistfuls of salt, given a lack of late-stage study results.

But Pfizer did just agree to pay nearly $14 billion for the firm, and a more than 100 percent premium on the company's price in March, before deal speculation began. It's hard to say how much of that price was for Medivation's blockbuster prostate-cancer drug Xtandi and how much was for its PARP inhibitor. But the deal's lofty valuation -- at 9.1 times expected 2020 sales, according to Bloomberg Intelligence, the second-highest ratio for a major cancer-drug deal since 2012 -- suggests pipeline hopes contributed.

Pfizer wasn't alone in those hopes: Medivation revealed in a securities filing that two other firms put in bids for it just shy of Pfizer's winning $81.50 per share. Gilead's R&D head told The Street it was in the bidding at one point but dropped out when things got too expensive. In addition to Sanofi -- which made the initial bid for Medivation -- Merck, Celgene, Amgen, and AstraZeneca were rumored to be interested in buying the company at one point or another.

There's likely still plenty of interest in PARP inhibitors. The list of available near-market cancer drugs with blockbuster potential is short. Other losers in the Medivation sweepstakes seem likely to look for other options; Gilead, for example, has said it may be willing to take a risk on the right PARP inhibitor. Johnson & Johnson, always the elephant in any biopharma M&A room, already has the rights to develop Tesaro's drug to treat prostate cancer and may want to control the rest.

Pursuing firms could pay up for Tesaro and its high hopes; the company's current enterprise value is more than $4.5 billion. Or they could seek a discount with Clovis. That company's trial results don't look quite as good. But at a roughly $1 billion enterprise value after the implosion of a separate lung-cancer drug last year, it's far more snackable. Clovis' drug is expected to get FDA approval in early 2017. Tesaro's timeline is less certain, but approval could arrive as soon as the middle of next year.

This drug class has already inspired one bidding war. Get set for more.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Allergan's Wednesday deal with Vitae notwithstanding, there have been just 36 completed biopharma deals worth more than $100 million in the U.S. and Western Europe this year, according to Bloomberg data. There were 102 such deals in 2015, 90 in 2014 and 81 in 2013.